Hey there, time traveller!
This article was published 7/5/2013 (1564 days ago), so information in it may no longer be current.
The debate in Manitoba over infrastructure funding is still pretty heated, two weeks after the NDP government announced it was raising the sales tax by one-point to essentially double the annual cash contribution to capital projects. When fully implemented, and combined with current cash-to-capital contributions, in theory the proposal will generate about $560 million annually for infrastructure (based on current PST yields).
The debate over the PST hike has been, as could be expected, pretty shrill stuff. Citizens, special interests, lobbyists and opposition politicians are all jockeying for position. There is no consensus yet, but it's fair to say there aren't a lot of people outside the government proper who like Premier Greg Selinger's plan to implement the tax, and do it without holding a referendum.
Of course, Manitoba is not the only province involved in a debate about politics, tax increases and infrastructure. Our neighbors to the east have their own debate going, and it's a doozy.
Newly-minted Ontario Premier Kathleen Wynne last week introduced a provincial budget which calls for, among many things, a new array of surcharges, levies and taxes to help pay for 'the Big Move,' the name given to her ambitious $50-billion transit improvement strategy. The Big Move would see $2 billion spent in each of the next 25 years on new highways, bus rapid transitways, and extensions to the Go Train and Toronto Transit Commission subway systems.
No specific revenue-generating measures have been unleashed, but they are expected soon. Ontario Finance Minister Charles Sousa has specifically discussed a plan to create more HOV (High Occupancy Vehicle) lanes on 400-series highways, and then offer motorists the option of buying a pass to use the lanes even if they are do not have at least two people in the vehicle.
A report from Metrolinx, the provincial transportation authority that oversees transit in Greater Toronto and Hamilton, is expected to table a report in June that will include specific revenue-generating tools. These are expected to include new highway tolls, gas taxes, development fees and property taxes. There has even been a suggestion that drivers start paying for each kilometre travelled on high-volume highways. Although Metrolinx only has authority for Toronto and Hamilton, Wynne has promised that similar measures are adopted by municipalities across the province.
Ontario's need for improved highway and transit infrastructure is hardly debatable. The most heavily populated region in the country is currently unable to move its people around in any effective manner. Heavy residential development in downtown Toronto has ensured that there is a gridlocked rush hour both into and out of the core of the city every day. Other highways, notably Highway 427, are virtually unusable for most of each day because of volume. This, and the Go Train and TTC Subway are running at capacity.
The debate in Ontario, much like the debate in Manitoba, centres on the tension between need and capacity to pay. The infrastructure deficit in most provinces is now measured in the tens, if not hundreds, of billions of dollars. The capacity of local and provincial governments to even keep up with the pace of degrading infrastructure is very much in doubt. In Manitoba, even with the additional PST revenue, we will only be slowing the growth in the infrastructure deficit. That's right, even with half-a-billion dollars of provincial money each year, the value of the work that needs to be done on our roads, bridges and amenities will continue to grow.
Wynne's Big Move could be a moot point, if opposition parties conspire to bring down her minority government by voting against the recently tabled budget. Right now, the Ontario NDP hold the balance of power and aren't making any promises one way or the other. If the Big Move is defeated, it's unlikely it will be replaced. It might not even make its way into a Liberal re-election campaign.
And therein lies the real danger in this debate. Time is money in the infrastructure debate. Selinger made that point in trying, rather feebly, to explain why he was introducing the PST hike this year without any meaningful discussion or debate. Wynne has expressed the same sentiment, although she has been much better about starting the debate on transit fees well before last week's budget.
One of the more poignant comments on the Big Move came from Mississauga's hereditary mayor, Hazel McCallion. Ontario's big-city mayors support the Big Move in principle because they know that without additional revenue, the province will eventually succumb to a permanent gridlock. When someone suggested the Liberals were losing faith in the Big Move, McCallion told the Globe and Mail: "We’ve had too much delay already. Action is what’s required."
Action indeed. However, if opposition politicians and (in the event of a snap election) voters lose faith in the Big Move, there will likely be no action. And the costs of fixing Ontario's transportation system will only go up.
In Manitoba, we're going to live with an eight-per-cent PST for two years before voters get a chance to punish Selinger for having temerity to raise taxes. By then the NDP government will have either proven the value of its tax hike or, as seems a distinct possibility now, a new government of different stripe will come in with a mandate to repeal the PST hike.
The question here isn't which party gets to govern here in Manitoba. The NDP have had a long run and their inability to make a compelling case for a PST hike may be evidence it has reached the end of its shelf life.
However, the real issue here is not which party wins the next election, but whether we, like Ontario, will ever get our minds around the cost of fixing infrastructure.